2 Companies Boost Dividends Again and Offer 4.5%-Plus Yields
By: Ned Piplovic,
Two companies, with ex-dividend dates on March 29, 2017, are extending their multi-year records of rising annual dividends and offering attractive yields of 4.5% and 5.5%, respectively.
Additionally, one of the equities rewarded its shareholders with a 25% share price increase over the last year. Since some investors speculate that the financial sector is overbought and due for correction, these two non-financial companies might be good ways for investors to diversify away from the financial sector.
Black Box Corporation (NASDAQ:BBOX)
Black Box Corporation provides technology solutions that assist its customers to design, to build, to manage, and to secure their IT infrastructure. The company also provides communications lifecycle, unified communications, structured cabling, video/AV, in-building wireless and data center services. BBOX provides its services to governments, health care, business services, manufacturing, retail, banking and other industries worldwide.
The share price traded in a $11.50 to $16.50 range between March 2016 and the end of January 2017. Since January, the share price dipped 35% and is trading around $8.50 as of late March 2017. While the price drop is significant, it could prove to be a good buying opportunity, if the share price recovers to January 2017 levels.
The current quarterly dividend of $0.12 is equivalent to a $0.48 annual dividend. Compared to the company’s 2.6% five-year average yield, Black Box Corporation’s current 5.5% yield is 112% higher. Since starting to pay a dividend in 2002, the Black Box Corporation has never lowered its annual payout. Additionally, the company has been raising its dividends since 2011 at an average rate of 15.7% every year. Consequently, the current annual dividend is 140% higher than the 2011 payout.
Algonquin Power & Utilities Corp. (NYSE:AQN)
Algonquin Power & Utilities Corp. engages in the generation, transmission and distribution of utility assets in North America. The company generates and sells electrical energy. It also owns or has interests in hydroelectric facilities, wind powered generating facilities, solar energy facilities and thermal energy facilities. Additionally, the company owns and operates a portfolio of regulated electricity, natural gas, water distribution, and wastewater collection utility systems. Through its multiple segments, AQN serves almost 800,000 customers spread across 14 U.S. states. Algonquin Power & Utilities, founded in 1996, has its headquarters in Oakville, Canada.
The company boosted its upcoming payout 10% higher than the previous quarter’s amount. The $0.1165 quarterly distribution equates to a $0.466 annualized dividend and a 4.5% yield. Algonquin Power & Utilities’ current yield is almost 9.5% higher than the yield’s five-year running average.
Including the projected 2017 annual dividend, the company will boost its annual payout for the eighth consecutive year. Since 2009, AQN increased its annual distribution by an 11.2% average growth rate every year. This makes the current annual payout 2.3 times higher than the 2010 annual distribution.
The company’s share price grew 18% between late March and mid-August 2016. After reaching its all-time high in August 2016, the share price reversed trend and dropped 23% by mid-November. At that point, the price reversed trend again and rose back up to the all-time high level. The price even reached its new all-time highest level of $10.10 during trading on March 21, 2017. The current price, as of March, 22, 2017, is 25% higher than a year ago in March 2016.
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